Merging Your Financial Personalities As Newlyweds

Being a newlywed is an exciting time. You may be moving in together for the first time or you may have lived together for a while first. Either way, you’re both now really primed to start laying out some firm plans for your future together. For many couples, this is also the time when they fully merge their finances. While it’s likely that you spent some time talking about when and how to merge your finances before you were married, this is when it gets really real.

There is no one-size fits all plan for merging your finances after you get married. Some couples like to keep their money separate even while working towards shared financial goals. Other couples prefer to merge everything and go from there. And still, other couples choose a hybrid of the two, where they have some joint accounts and some separate accounts.

The newlywed stage is also often when differences in how you and your partner manage money start to emerge. So let’s go through some of the things you should consider when merging your financial personalities as newlyweds that will help make the transition at little easier.

Get An Overall Picture Of Your Current Finances

The first step in merging your finances as a couple is to figure out where you each stand financially. What kinds of debts are you bringing to the table? How much savings do you have? What is your monthly cash flow like? Knowing where you are financial makes it much easier to start planning for your joint financial goals.

Grab a piece of paper and list out all of your income from all sources, your debts (including monthly minimum payments), and your savings balances in all accounts. This will help you see the assets and debts that your newly formed household is working with.

If you haven’t already, jot down a list of all of your household expenses. These might be completely new to you if you’ve only recently moved in together.

Also, take a look at your credit reports and credit scores because they can impact your finances beyond just getting loans. Your credit scores can also impact your insurance premiums or even your ability to find a new job.

Sit down with your partner and have a #RealMoneyTalk about how you feel about your current financial position as a couple. This is the first opportunity for you to learn more about your partner’s financial personality and to see how closely it matches your own.

Create Joint Short and Long-Term Financial Goals

Now that you know where your finances currently stand as a couple, the next step is to think about and talk through your life goals. Think about what you want your lives to look like over the next 1, 5, 10, and 30 years.

Do you see yourselves moving to a new city in a year or two? Having kids and/or buying a house in the next five years? Retiring by 50 to your lakehouse?

All of those life goals have a cost and will affect your financial decisions going forward. Talking about and agreeing on life goals makes it much easier to merge your financial personalities because you are both working towards the exact same thing, even if you follow different money philosophies.

Keep in mind that this is not a one-time conversation. It’s quite possible that your goals will change over the years. So be sure to check in with each other and have this conversation on a regular basis.

Find the Right Balance Between Saving and Spending

One of the biggest places where couples’ financial personalities tend to bump heads is when one is a natural saver and the other is a natural spender. It can be really frustrating for both partners.

The natural spender can start to feel constricted and like they aren’t able to enjoy the money that they’ve worked so hard to earn. On the other hand, the natural saver might feel resentful because they would rather maintain a frugal lifestyle in the short term so that you can reach your financial goals as a couple faster.

The key here is to compromise. If you’ve already agreed on a set of life and financial goals, then it makes it much easier to work through this particular issue.

For example, if you know that you want to buy a house in three years and you know how much the down payment is, then you know exactly how much you need to save a month to reach that goal.

If you decide in advance how much should be spent on what, then the saver can feel comfortable knowing that the savings they crave are planned for every single month. The spender will also be happy because they have a chunk of earmarked funds available to spend on their preferred categories every month.

Just like with your financial goals, you will likely need to reassess this over time to help find the right balance that fits both of your personalities.

Create a Budget You Both Can Agree On

Having a budget is a great way to help different financial personalities get on the same page. All a budget is, is deciding in advance what to do with your money. It gives you a realistic picture of your finances and allows you to see what kind of progress you can make on your other financial goals by tweaking things here and there.

Your budget should include all of your daily living expenses. But it should also include categories of expenses that are important to you each as individuals. Agreeing on these spending items in advance makes it a lot less likely that your financial personalities will bump heads.

Decide Between Joint Accounts vs. Separate Accounts

Another thing that you will want to consider when merging your finances is whether to have joint accounts, separate accounts, or a mix of the two.

Some couples keep their finances completely separate. Each contributes a certain amount or percentage to their household expenses but then manages their money separately. Couples who follow this approach love the autonomy that it provides. On the other hand, it potentially creates friction if one partner is a spender and the other is a saver. It can also be a bit harder to set and track your progress towards joint financial goals.

Couples also choose to completely merge their finances. They manage their households using joint checking and savings accounts and credit cards. The plus side to this approach is that both partners know exactly where their finances stand as a unit. The potential negative is that some partners might feel constricted by not having funds that are just theirs.

Turbo’s household income view shows your verified household income — either from their IRS-verified tax return or by inputting a self-reported number — all in one place to give you and your partner a richer and deeper financial health profile so you can make informed financial decisions with confidence.

Another option for managing money as a couple is to use a mix of joint and separate accounts. This can give the best of both worlds while avoiding the downsides. One way to do this method is to have joint accounts for the household and your financial goals and have individual accounts that you can use for your personal monthly spending. This is a great way to help spenders stay within budget and to help savers feel confident that the savings goals are being met.

Merging your financial personalities as newlyweds can be challenging but these tips will get you back on the path to newly wedded bliss in no time.